BHP's 2nd quarter iron ore output falls 9%

BHP Group's second-quarter iron ore production has fallen nine per cent and the mining giant has flagged a $US600 million hit due to production disruptions at its copper and iron ore operations.

The world's biggest miner said on Tuesday that unplanned production outages at Olympic Dam, Spence and Western Australia Iron Ore are likely to negatively impact productivity and flagged that it would revise guidance at its results on February 19.

The miner also raised its 2019 copper production forecast to between about 1.6 million tonne and 1.7 million tonne, bolstered by the retention of Cerro Colorado copper mine in Chile, after a sale to private equity house EMR Capital fell through.

"Yes, iron ore output might have been a little softer but overall I'd say production was broadly in line," said a fund manager in Melbourne who declined to be named.

"I'd think about the $600 million as more of an opportunity cost that we knew about from earlier in the quarter."

BHP's iron ore output declined to 66 million tonnes during the three months ended December 31, compared with 72 million tonnes a year ago, hurt by a forced train derailment that caused a supply disruption.

The mining giant had said in November that it expected some interruption to its Australian iron ore exports after it was forced to derail a cargo train loaded with the commodity after it ran away en route to a WA shipping hub.

The driver, who had stepped out to inspect one of its 268 wagons, was left in its wake and about 1.5km of track was damaged before the train was forcibly derailed.

The Anglo-Australian miner maintained its full-year guidance of 273 million to 283 million tonnes of iron ore from its Western Australian operations.

In other metals, BHP's copper output fell three per cent at 416,000 tonnes in the quarter, hurt by planned maintenance as well as outages.

BHP also flagged a $700 million first-half impact due to higher Australian and Chilean income tax payments than last year, and the settlement of an Australian transfer pricing dispute.

The state of Western Australia said on Monday that it was in talks with the miner after an audit had found that BHP had underpaid royalties on iron ore shipments sold via its Singapore marketing hub stretching back over more than a decade.